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REP UNIVERSE SHRINKS

Not too long ago, there were some 20-odd station rep firms. Soon there will be three.

That’s despite the fact that there are a lot more TV stations on the air now then there were 20 years ago with more programming and more time to sell. As the business gets bigger, the rep biz gets smaller.

Petry is in talks to acquire Blair and MMT is expected to be bought out and shut down by Cox Enterprises. As a result, most of MMT’s stations will be absorbed by Cox – but not the staff, including well-known vice president/programming director Matt Shapiro. Cox already owns TeleRep, which several months ago acquired HRP and also reduced staff.

Katz started the wave of consolidation some three years ago when it bought Seltel Inc. However, those two companies still maintain separate offices and staffs. When the consolidation is over, all three firms – Katz, Seltel and Petry – will have annual billings in the $1 billion-range.

What all this means is that it’s possible one or two companies will service markets where there are five stations. Besides selling national spots for stations, reps are key advisers on programming decisions as well as consulting on several other areas of the business, which has station operators not too crazy about the rep consolidation. But they understand it has to happen. Indeed, as the industry has grown, it has given large broadcast groups the power to put downward pressure on commission rates. “Profit margins dropped dramatically,” says Seltel executive vice president/chief operating officer Ray Johns, who adds that there will be “three monster rep firms.”

Katz and Seltel, Johns says, have kept their businesses completely separate. To emphasize the competition, Johns points out that Seltel recently lured away some Katz stations into their fold.

“To me, Katz is one of my competitors,” he explains. “By the same token, if Katz gets a big station, it helps the corporate company.”

Another trend having an impact on the rep business is large group owners taking care of the rep end of the business themselves. Group W has always represented its own stations, as have CBS and CapCities/ABC. Adding to that list are Chris Craft and New World, which have their own inhouse rep businesses that drain more business from the traditional rep firms.

“On the surface, the fact that there are more stations on the air should mean more business for reps,” Farrell Reynolds, head of New World Sales & Marketing, says. “But there is not more viewership going on. Any time the audience gets fragmented, it is a problem for all of the vendors in the marketplace.”

Station groups seem willing to accept a world of three rep firms. But advertisers have yet to weigh in on the idea.

“This is a business where the dominant party survives,” says Alan Bell, president, Freedom Broadcasting. “Everyone else is a footnote to history.”

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